A capital buffer of 2.5% will be retained by the world’s central banks in order to stay protected during a crisis, The Wall Street Journal reports. Bank of International Settlements (BIS) is guiding the proposal on higher bank capital standards via the Basel Committee on Banking Supervision.
As per the new proposal, banks will be required to hold a capital buffer between 1% and 2.5% tier one common equity, depending on their importance. This will be in addition to the 7% tier one common equity that the Basel III committee already determined all financial institutions should hold.
Click here for the story from The Wall Street Journal.
Click here for additional coverage from Reuters.